GBP/USD drivers this week are found in GBP cross pairs as current close prices reside just below most vital break points. The exclusion is GBP/EUR as it sits just above vital supports. GBP/USD correlates in the high + 90’s to its cross pairs to include GBP/EUR at + 93%. A break higher in GBP cross pairs will see GBP/USD higher. As mentioned last week, GBP/USD price is extremely low overall and more oversold intraday than overbought. As a strategy, due to severe oversold in EUR, AUD and NZD, long and buy dips is the way.
GBP/USD. Big most vital breaks overall to travel far higher are found at 1.2756 and 1.2809. To see 1.2756 then 1.2607 must cross higher. The path above lies at 1.2384, 1.2458, 1.2494, 1.2530, 1.2607. How to handle above is watch 1.2530 to 1.2607 as a failure to break higher will see a sharp reversal lower back to 1.2458 and lower upon a break of 1.2458.
Below points 1.2317, 1.2296, 1.2282, 1.2217 and 1.2190. Should 1.2200’s be seen then long. I don’t see GBP heading lower than 1.2200’s.
GBP/CHF. Vital break points above are located at 1.2528 and 1.2574 from close at 1.2470. Below points 1.2412, 1.2334 and 1.2313. Most important is 1.2334 and 1.2313 as both are downtrend lines.
GBP/JPY. Most vital range is 137.97 to 1.34.98, both vital break points. A break lower at 134.98 would target 131.78. A break of 137.97 next targets 138.71, 139.39 and 139.59. Above 134.98, GBP/JPY is oversold and has plenty of room to run.
GBP/EUR. From close at 1.1638, vital supports reside at 1.1613 and 1.1523. Above 1.1613, GBP/EUR is highly oversold. Next points above 1.1636, 1.1659 and 1.1706. The overall target to begin a further uptrend is 1.1800. Downtrend points are located at 1.1425 and 1.1341.
GBP/CAD. From close 1.6658, vital break points above are located at 1.6845 and 1.6936. Why wide distance from close to break is because GBP/CAD’s wide ranges and 80 + daily pip allowable movements. GBP/CAD is a terrific currency to trade. Next above points include 1.6677, 1.6709, 1.6777 and 1.6806. The sharp reversal points come at 1.6777 and 1.6806 if faulure to break higher. Below points 1.6612, 1.6573, 1.6553 and 1.6492.
CAD/GBP. From GBP/CAD 1.6658, CAD/GBP translate to 0.6003. Tops in CAD/GBP are located at 0.5939 and 0.5912 and translates to GBP/CAD 1.6837 and 1.6914.
GBP/NZD. From close 1.7609, next break points 1.7710 and 1.7867. The road higher begins at 1.7610, 1.7632 and 1.7671. Below 1.7554, 1.7476 and 1.7398. GBP/NZD is another great currency pair to trade and its the granddaddy of movements because it travels far and wide on any given day. Best way to view such a far mover currency pair is to view opposites.
NZD/GBP from GBP/NZD 1.7609 is actually 0.5678. Major points for NZD/GBP to travel higher is 0.5650 and 0.5616. Both translate to GBP/NZD at 1.7699 and 1.7806. Watch GBP/NZD reversal or higher at 1.7699.
GBP/AUD from close at 1.6825, next above 1.6826 and 1.6884. GBP/AUD is in a crucial position. Above 1.6884 targets 1.6921 and 1.7016. Below points 1.6635 and 1.6520. Downtrend lines begin at 1.6462 and 1.6445.
AUD/GBP. 1.6825 in GBP/AUD translates to AUD/GBP at 0.5943. Most vital breaks in AUD/GBP are located at 0.5949 and 0.5940. Both translate to GBP/AUD at 1.6835 and 1.6809. GBP/AUD break at 1.6809 should see a decent downside move while 1.6826 and 1.6835 must break higher to target 1.6884.
Brian Twomey, Inside the Currency Market, btwomey.com